MTN will now undertake site preparation work. Credit: nedu503 / Pixabay.

Freehill Mining has started Phase One mining operations at its 100%-owned Yerbas Buenas magnetite project in Chile.

Local contractor MTN Gold has been selected to provide turnkey mining, crushing and ore processing services for the mine.

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The firm will be responsible for the supply of all necessary mining, crushing and processing equipment.

Freehill Mining CEO Paul Davies said: “The appointment of an experienced and proven contractor is an excellent outcome for Freehill and consistent with our strategy of establishing a low CAPEX, low OPEX, sustainable mining operation at Yerbas Buenas.

“Our immediate focus is to ensure the consistent delivery of ~5,000 tonnes of saleable product per month using third-party infrastructure and support. Building a steady revenue base from the Phase One operations is our key objective so we can self-fund our near-term growth and limit shareholder dilution.”

With plans to start first ore sales in January 2022, the mine will have a production rate of around 5,000t/m of magnetite, under the current permit.

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According to a report by DD Consulting, the ore from the Yerbas Buenas mine is suitable for the production of 68%+ Fe grade pellet feed, 53% Fe grade LG fines and 63% Fe grade HG fines.

MTN will now undertake site preparation work, with plans to start operation at the mine within the next 90 days.

Davies continued: “We can also confirm that there is considerable demand for the Yerbas Buenas ore and we are assessing a number of sales channels.”

Freehill Mining said that the magnetite product from Yerbas Buenas would be suitable for sinter feed and for sale as feed to a pellet feed production facility.

Moreover, the ore is expected to provide very high-grade magnetite concentrate that could be suitable for feeding direct reduced (DR) ironmaking.